Blue Sky Alternatives Access Fund secures control of bank account
21 May 2019, Written by Business News Australia
Listed spinoff of Blue Sky Alternative Investments (ASX: BLA) the Alternatives Access Fund (ASX: BAF) has confirmed it is solvent and now separate from its parent as BLA falls into receivership.
Last week, the directors of BAF took steps to secure control of the bank account holding in excess of $29 million by placing a stop on the account and replacing all manager account signatories with the three BAF directors.
Confirmation of BAF's separation from its parent follows yesterday's news that Blue Sky had called in KordaMentha as receiver and manager of the company.
BAF and the fund managers BSAAF Management (BSAAF) have also confirmed that the fund remains solvent.
"BAF is considering its options and will take such action as is considered necessary to protect its investment portfolio," says BAF.
BAF also intends to continue to enter into an agreement with Wilson Asset Management that would give Wilson the right to manage the BAF portfolio.
The alternatives fund is still looking at legal advice about the larger Blue Sky issues and will update the market with any updates.
Yesterday, after a year of languishing results, director conflicts, class action speculation and a failed rescue deal with a US venture capital fund, Blue Sky finally hit the wall and appointed KordaMentha as receiver and manager.
The receivership followed the company failing to meet the conditions of a $50 million loan from US-based Oaktree Capital.
The advisory firm's Mark Korda and Jarrod Villani will be undertaking the receivership process, while Bradley Hellen and Nigel Markey of Pilot Partners have also been appointed as voluntary administrators.
The move comes after Oaktree decided to enforce its rights under the convertible note facility entered into by Blue Sky, with KordaMentha noting its appointment is necessary if Blue Sky is to maintain its investment teams, key clients and stabilise the operations and capital structure of the business.
The announcement comes just three days after the embattled group announced Justine Henwood as its new CFO, the third person to take on the role in seven months, while new CEO Joel Cann has only been in his position for just over two months.
In 2017, Blue Sky was one of Brisbane's top 25 listed companies with a market capitalisation of more than $500 million, but in March last year the group's fortunes turned after a research report from Glaucus in the US raised suspicions about "wildly exaggerated" fee assets under management.
At the time BLA shares were trading around the $11.50 mark, but as the share price plunged the fallout led to two board purges and the resignations of managing director Robert Shand, and chairman John Kain along with other board members.
Anticipation around rescue packages led to a slight rebound in the share price last year, but it was short lived and the stock continued its steady decline. BLA shares last traded at $0.185 on Friday.
This final trading level is around 10 per cent of the $1.87 per share conversion condition under the deal with Oaktree, which gave Blue Sky a $50 million lifeline in September last year.
Business News Australia
Author: Business News Australia